Popular SJC Sports Rinks in limbo after operator admits fraud

Micheal Schwartz, 39, center, operator of SJC Sports Rinks, listens from his seat in the San Juan City Council chambers as the council discusses the cancellation of his contract due to Schwartz' recent guilty plea to a mortgage-related fraud that cost investors and banks $1.8 million. Schwartz is joined by his father, Fred Schwartz, left, and his wife Elizabeth, right. LEONARD ORTIZ, STAFF PHOTOGRAPHER

A San Juan Capistrano sports rink popular with scores of amateur soccer teams and other sports teams in south Orange County will change operators next month after its owner admitted to a mortgage-related fraud that cost investors and banks $1.8 million.

Club teams have rented SJC Sports Rinks for games, clinics and tournaments since it opened in June 2012 behind Marco Forster Middle School.

Business is booming, but owner Michael William Schwartz has a problem: two federal convictions that carry a potential prison sentence, steep fines and a lifetime as a convicted felon.

Schwartz, 39, pleaded guilty in U.S. District Court in June to wire fraud and mail fraud in a tentative agreement with prosecutors related to Schwartz’s former mortgage company, Service First. He’s free on a $10,000 bond as he awaits sentencing.

City officials recently learned of his crimes, and the City Council on Tuesday voted to option the 30-day cancellation notice for the city’s contract with Schwartz amid outcry from Schwartz’s supporters, many of whom use the rink.

The city and the Capistrano Unified School District own the rink and the land on which it sits. Schwartz added thousands of dollars in upgrades, but City Attorney Hans Van Ligten noted Tuesday that the contract allows the city to keep those upgrades. Removing them would constitute the destruction of city property, he said.

“That is not private property. That is public property for which Mr. Schwartz has a license agreement,” Van Ligten said.

Several people urged the council to keep the contract and said Schwartz is a good person who was turning his life around by operating the rink. Councilmen said they had a responsibility to sever ties with Schwartz but emphasized they want the rink to remain open with no disruption to the teams that depend on it.

“The rink isn’t going to be lifted up and disappear,” Councilman Derek Reeve said. “It’s going to be there. It’s simply a matter of who’s going to run it.”

City Manager Karen Brust said the city’s community services department will operate the rink while employees find a new operator.

“We’re going to do our best to keep that open,” Brust said.

But the removal of a man who supporters say is essential to the rink’s success has left soccer and lacrosse enthusiasts throughout Orange County wondering if they’ll need to find a new place to call home.

Glen Miles, director of Victory Lacrosse in San Clemente and San Juan Capistrano and the lacrosse coach at St. Margaret’s Episcopal School, called Schwartz a “man of character and integrity” who “has done a tremendous job of turning that rink around.” Miles’ Victory box lacrosse program is in the midst of a season that’s based at the sports rink. Councilmen say the games should continue with no interruption.

But supporters worry it won’t be the same. They say Schwartz rents at a much lower rate than other Orange County facilities and allows children’s soccer teams to use the fields at no cost.

“He’s helping the community big time,” said San Juan Capistrano resident Fredy Ocampo, a coach who was watching his girlfriend play Friday night. “The only reason this thing is packed is because of the prices and the way he is.”

Micheal Schwartz, 39, center, operator of SJC Sports Rinks, listens from his seat in the San Juan City Council chambers as the council discusses the cancellation of his contract due to Schwartz' recent guilty plea to a mortgage-related fraud that cost investors and banks $1.8 million. Schwartz is joined by his father, Fred Schwartz, left, and his wife Elizabeth, right. LEONARD ORTIZ, STAFF PHOTOGRAPHER
San Juan Capistrano Mayor Sam Allevato, left, and Mayor Pro Tem Larry Kramer, right, listen as Michael Schwartz, center, operator of SJC Sports Rinks speaks before the City Council about the city's decision to cancel his contract. LEONARD ORTIZ, STAFF PHOTOGRAPHER
Fred Schwartz, left, father of SJC Sports Rinks operator Michael Schwartz, center, raises his hand to calm Elizabeth, Michael's wife, as she attempts to address the City Council after they voted to cancel the contract with Schwartz due to his recent guilty plea to a mortgage-related fraud that cost investors and banks $1.8 million. LEONARD ORTIZ, STAFF PHOTOGRAPHER
Supporters of SJC Sports Rinks Michael Schwartz stand against the back wall of the San Juan Capistrano council chambers as the City Council voted to cancel the contract with Schwartz. LEONARD ORTIZ, STAFF PHOTOGRAPHER
The SJC Sports Rinks in San Juan Capistrano will continue to be open after the city canceled its contract with operator Michael Schwartz. “The rink isn't going to be lifted up and disappear,” Councilman Derek Reeve said. “It's going to be there. It's simply a matter of who's going to run it.” LEONARD ORTIZ, STAFF PHOTOGRAPHER
Michael Schwartz, 39, operator of SJC Sports Rinks speaks before the City Council about the city's decision to cancel his contract in response to his recent guilty plea in U.S. District Court in June. LEONARD ORTIZ, STAFF PHOTOGRAPHER
Micheal Schwartz, center, operator of SJC Sports Rinks, sits in the San Juan City Council chambers as the council discusses the cancellation of his contract. LEONARD ORTIZ, STAFF PHOTOGRAPHER
The SJC Sports Rinks in San Juan Capistrano will continue to be open after the city canceled its contract with operator Michael Schwartz. LEONARD ORTIZ, STAFF PHOTOGRAPHER

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